Unfortunately I know exactly what is going on, having bought a bunch of the devices, experiencing the same problem, and then discussing with Vesternet
You probably noticed that the internal temperature sensor was inaccurate, floating up and down a few degrees hotter/colder than actual, probably because it’s located close to the (warm) internal components. The manufacturer brilliantly decided to deal with this by updating the firmware to essentially disable the internal sensor. When you select the internal sensor then it behaves exactly as you describe - completely useless. My fix for this was buying some cheap sensors (these), connecting as internal sensors, but then tucking inside the heatit’s hollow plastic frame before I fix it.
Even this isn’t perfect, as it records a temperature consistently a couple of degrees warmer than actual, but at least the error is fairly consistent, so I can adjust it with openHAB rules.
This is all very non-ideal, and I considered returning the devices, but unfortunately there seems very little competition for zwave thermostats. Positively scandalous that a manufacturer can ship a device that doesn’t work properly, and cover up the problem with a firmware bodge that disables a key feature. But there you have it!